The global logistics software market size was valued at USD 14.83 billion in 2022. It is estimated to reach USD 33.17 billion by 2031, growing at a CAGR of 9.36% during the forecast period (2023–2031). There has been a surge in digitization in almost every field worldwide, and the logistics sector is no exception. The growing digitization of the logistics sector is driving the global logistics software market. Moreover, the growing use of the internet has led to its rapid proliferation, which has increased the global e-commerce sector, boosting market expansion.
Logistics services software refers to a comprehensive software solution, available on the cloud or on-premise, that facilitates seamless communication and integration between transportation and warehouse management systems. Logistics is a link in the supply chain that increases the utility of time and place. Logistics software manages and schedules the mailing, shipping, and tracking of correspondence, packages, and other items.
Business logistics software is designed to display routing and scheduling information automatically and to plot drop-off points on a map using delivery addresses. This logistics software can create practical routes to coordinate multiple deliveries when goods or services are required at a specific time. It also may enable users to schedule delivery personnel and vehicles to maximize workforce availability.
|Market Size||USD 33.17 billion by 2031|
|Fastest Growing Market||Europe|
|Largest Market||North America|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
With the advancement of information technology and telecommunications, an increasing number of industry sectors are incorporating IT solutions into their operational workflows. Companies from different industries are transforming their business processes into digital formats to streamline the business and improve productivity. The companies are also adopting software for logistics applications, including warehouse management, fleet management, and supply chain management. For instance, Maersk and IBM launched a blockchain-enabled digital container logistics platform called TradeLens.
Moreover, many studies show that companies are willing to adopt digital solutions for logistics. For instance, 65% of logistics managers who participated in the Forbes Insights survey knew they needed to transform their business model to survive the digital age. The growing awareness among the end-users is anticipated to further boost the logistics software market's growth.
The e-commerce industry across the world has been growing at a rapid pace over the past few years. A UNCTAD analysis predicted that by 2020, online retail's share of overall retail would have increased from 2019's 16% to 2020's 19%. Countries such as Korea, China, and the United Kingdom had the highest share of e-commerce sales out of the total retail sales.
Several factors, including the growing penetration of the internet and smartphones, majorly augmented the growth of the e-commerce industry. The rapid growth in the e-commerce industry pressured the logistics suppliers to deliver many products safely and quickly. Therefore, the logistics suppliers adopted different software solutions to cope with the growing demand. This, in turn, boosts the logistics software market growth.
Many companies are still relying on traditional operation processes for various business functions, including logistics. They are hesitant to transform their legacy machines into digital ones. Comparatively, a smaller portion of end-users currently use logistics software for their businesses. Research published by Oracle studied the adoption of adoption of new technologies for logistics applications. This study found that one-third of the participants in a survey are using logistics software such as warehouse management and transportation management software. This shows that a large part of the end-users are still adopting logistics software solutions for their business. This, in turn, is majorly hampering the growth of the logistics software market.
Emerging technologies such as the Internet of Things, Artificial Intelligence (AI), and Blockchain are experiencing increasing adoption throughout several industry sectors. These technologies have been used for various applications by the end-users. For instance, IoT is leading to the logistics department's growing connections between goods, packaging, transportation hubs, and vehicles. Its adoption has resulted in generating more data that helps manage assets remotely, predict risk, ensure proper cargo handling, and forecast traffic congestion.
Similarly, AI is being used for supply chain predictive analytics and demand forecasting of products to optimize the use of their warehouse. On the other hand, blockchain technology helps logistics firms reduce red tape, automate the entire procurement process, and remove human error. These technologies' development and integration into logistics software are anticipated to provide a competitive advantage to the market players. This, in turn, is anticipated to create opportunities for market growth over the forecast period.
Based on region, the global logistics software market is bifurcated into North America, Europe, Asia-Pacific, and RoW.
North America is the most significant global logistics software market shareholder and is estimated to grow at a CAGR of 8.14% over the forecast period. North America's logistics software market is primarily driven by the region's rapidly expanding urbanization and the digital revolution in the transportation industry. The expansion of IT infrastructure and the increasing demand for cloud computing also contribute to the expansion of the market. The presence of market leaders who provide advanced logistics software in the region is another factor augmenting the expansion of the regional market. This market's players are implementing innovative software to meet the rising demand for advanced supply chain management services in the automotive, transportation, and food and beverages industries. This is expected to create lucrative opportunities for regional market growth.
Moreover, a strong financial position, increasing investment to adopt leading technologies and tools, and booming telecommunication and IT and healthcare industries are logistic software market growth in the region. Similarly, the expansion of the healthcare industry is driving demand for logistics software.
Europe is anticipated to exhibit a CAGR of 9.19% over the forecast period. Freight forwarders throughout Europe increasingly use software that enables them to plan and process shipments. They benefit from solutions that help them keep track of assignments and check container and wagon capacity. Advanced functionalities allow businesses to monitor deadlines, equipment usage, and dates. Many businesses also use multi-transport software for rail, sea, truck, air freight, and roundtrip tracking. Service providers are also offered multiple functionalities for truckload management, export and import management, customer management, and shipment tracking.
Furthermore, incorporating additional features enables businesses to enhance the efficiency of load optimization, routing, and scheduling and effectively oversee driver and dispatch management. Integrated software systems can be used on mobile and desktop platforms, including Windows, web apps, and Android. Enterprises, agencies, small and medium enterprises, and startups use them. There are around 634 Logistics Tech startups in Germany. All these factors boost the growth of the European logistics software market.
The Asia-Pacific logistics software market is expected to undergo substantial growth over the forecast period due to the surging demand for supply chain management software in various industries. This expansion is because of rapid industrialization and increasing government spending. In addition, the rising prevalence of cloud-based software in the Asia-Pacific region results from the increasing adoption of internet-based technologies by companies in the region. The ever-increasing economic development of the nations in this region and the expansion of the services industry are compelling businesses to make substantial logistics software investments to sustain their growth and boost their productivity. Similarly, China's economy has developed rapidly in recent years, particularly logistics. Logistics software has applications in the logistics industry to improve management and productivity. Therefore, due to the expansion of the logistics industry, there is a rise in software adoption in China, which contributes to the expansion of the market.
The global logistics software market is bifurcated into deployment, application, and end-user.
Based on deployment, the global market is segmented on-premise and cloud.
The on-premise segment is the highest contributor to the market and is projected to grow at a CAGR of 8.59% throughout the forecast period. On-premise software is stored and hosted on servers physically owned by the business and usually located in its main office. The business has to purchase a license for the software from the players; the software would then be installed and maintained on the business's servers. The business may have more ownership over the purchased software and be responsible for maintaining and managing those servers or outsourcing the maintenance costs. On-premise software usually requires a high cost, covering the software license and hardware and infrastructure costs associated with hosting the software on your servers.
Cloud services allow growth-minded organizations to move capital expenses to operational expenses while requiring less maintenance and automatic upgrades. Customers moving to cloud technology eliminate the need for IT and hardware resources while moving their information to a secure, private cloud environment. An integrated cloud service provides your organization with the newest application features, propelling you past competitors and giving your logistics solutions a competitive advantage. Cloud-based solutions work on a subscription model. The software is paid for on an ongoing monthly (or yearly) basis.
Based on application, the global market is segmented into transportation management, warehouse management, asset and fleet management, data management, and others.
The data management segment is the largest contributor to the market and is projected to exhibit a CAGR of 10.32% throughout the forecast period. The logistics industry is one of the biggest sectors that could make the most out of big data and business intelligence. The magnitude of the daily flows involving all shipments, their weights, dimensions, contact information, and returns generates an enormous quantity of information that must be managed. In addition, the utilization of big data in the logistics sector is causing a significant transformation within the industry. By utilizing diverse applications and illustrative instances, logistics operations can be enhanced in terms of route optimization, reduction of the final leg of shipping, enhancement of transparency, and automation of warehouses and the supply chain. Thus, logistics analytics can be expedited more efficiently than ever, as valuable insights can be generated with minimal effort.
Third-party vendors can offer warehouse management as a service, which WMS providers outsource. Either as a service, which enables clients to concentrate on their core business operations or as software without service, market players sell their products. WMS software can be a stand-alone system or a component of a supply chain execution suite, and it is commonly used by businesses to meet the specific customer requirements of their supply chain and distribution channel. A warehouse management system (WMS) is a software solution that offers visibility into a business's inventory and manages supply chain fulfillment operations from the distribution center to the store shelf.
Based on end-users, the global market is bifurcated into healthcare, oil and gas, automotive, IT and telecommunication, government and defense, and others.
The automotive segment dominates the global market and is predicted to exhibit a CAGR of 8.18% during the forecast period. Automotive Logistics is the leading global resource for automotive logistics and supply chain professionals. Automotive logistics encompasses a diverse range of activities prioritizing timely and high-quality vehicle distribution. The field of automotive logistics encompasses the intricate process of transporting vehicles from several international manufacturing sites to customers around the globe. Quality and punctuality are vital drivers to satisfying the customer's needs in the vehicle logistics processes.
Healthcare supply chain software restructures medical supply procurement, inventory management, and overall spend management. The software is also used to promote and support transparency between primary and ancillary care in the types of services and procedures that they provide to the patients. The healthcare supply chain helps stakeholders like providers, distributors, and suppliers to order and receive medical supplies and products effortlessly. This software allows physicians, nurses, and medical professionals to automate manual, time-consuming supply chain-related tasks, leverage workflows and business intelligence to lower costs, and improve care delivery.